Hercules is _not_ used by IBM's own developers. Being found with Hercules on your computer at IBM gets you in trouble. I know people who work on mainframe-related stuff inside IBM and they steer well clear of Hercules. And I've heard that IBM's computer monitoring stuff (antivirus, asset protection, etc.) looks for Hercules and flags it.

But IBM _does_ have their own mainframe emulator, zPDT (z Personal Development Tool), sold to their customers for dev and testing (under the name zD&T -- z Development and Test), and to ISVs under their ISV program. That's what IBM's own developers would be using if they're doing stuff under emulation instead of LPARs on real hardware.

(And IBM's emulator is significantly faster than Hercules, FWIW, but overall less feature-full and lacks all of the support Hercules has for older architectures, more device types, etc.)